Addressing key misunderstandings about digital transformation
When it comes to digital transformation and what it is and what it is not, James Hickman, Head of Sales at Altron Karabina, wants to immediately clear up some misunderstandings that some people might still have with and about this topic.
The first thing that needs to be addressed is confusing digital transformation with modernisation.
“Digital transformation is about embracing new technologies to do new things in your organisation or to do current things in a new way. The problem, however, is that digital transformation blends into the murkiness of everything that is mildly new and innovative when most of these are just basic modernisation. There is a very important differentiation that needs to be drawn between the two,” says Hickman.
There is no doubt that any organisation that is not embracing technology or thinking about how they are doing their business differently will almost certainly not be around in a few years. And just doing the basics to stay alive is not digital transformation, to Hickman, this is merely modernising the organisation.
“Digital transformation is when an organisation uses technology and skills to fundamentally either transform what they do, how they do it, change the customer experience of what they do or the employee experience of their business. If you are not touching on one of these four points, you cannot really claim that you are implementing digital transformation,” adds Hickman.
Let’s use the example of a company using the new Microsoft HoloLens for training airline technicians on how to fix aeroplane engines around the world, fundamentally changing the operations of the company and how they fix airline engines. An aeroplane’s engine requires urgent repair, but there isn’t an experienced technician available where the plane is situated. There is only a young technician that is not as familiar with this specific aeroplane engine on hand to do the repairs, which needs to be done urgently. With the HoloLens, the expert on this engine, who is miles away, can now guide the young technician through the entire process and steps to find and fix the engine’s problem through the cloud. That, according to Hickman, is a true digital transformation activity.
“A company launching a new mobile app for customers is not digital transformation. That is simply modernisation and updating your platform for your clients to be able to use it. There are hundreds and thousands of new mobile apps developed and released today and it is just keeping with what is required by their customers today. It is not fundamentally new,” he stresses.
It’s not the CIO's job
The second yet equally important misconception Hickman says needs to be cleared up when it comes to digital transformation is whose responsibility and job digital transformation in an organisation is.
Inevitably one has to look at what would be the driver of digital transformation in organisations and for Hickman, changing and improving the customer’s experience is the first and foremost driver, which is ultimately driven by business and not IT. IT plays a role in delivering it through technology, which is the enabler.
“Digital transformation is not the CIO’s job. That is very important to note. The CIO never deals with the customer and the customer’s experience. Yes, the CIO will play a role in delivering some of the technology to enable digital transformation, but it is not the role and responsibility of the CIO to drive and see to it that digital transformation in an organisation happens,” Hickman says.
If a company is making digital transformation the CIO's job, they are, according to Hickman, getting off on the wrong foot.
“The CIO does not really impact the business's strategy in any meaningful way. The CIO is there to enable people with technology. If they are making it a CIO priority, they are putting it in the wrong place,” Hickman continues to add.
The short-term insurance industry is a good example of an industry that has transformed the way they do their business, improves the customer experience and ultimately leveraged the power of technology at the end to assist them in evolving and growing. For the companies that decided to cut out the broker and go direct, there were obvious cost advantages. However, we have seen this go a step further where they offer rewards if they can beat your current quote. At the outset this doesn’t seem so transformative. However, on the backend, for them to pay you, they need the proof of the competing quote and as such start to gather a treasure trove of competitive information. They then use big data and AI technology to refine their offerings, pricing, etc, with information that a traditional insurer only wished they had.
The short-term insurance story is another example of true digital transformation, according to Hickman. “And who is responsible for that move? It was not the CIO, I assure you. The CIO might have been involved when it came to building the technology and being responsible for building the system that transforms information into actionable insights, but that is how far the CIO's role stretched.”
Those who say that digital transformation is the CIO's job are probably the same people who are confusing the modernisation of technology and digital transformation.